Capital Clean Energy Carriers Corp.

Thank you for standing by and welcome to the Capital Clean Energy Carriers Corporation First Quarter 2026 Financial Results Conference Call. We have with us Mr. Nikos Kalapotharakos, Chief Financial Officer, Mr. Brian Gallagher, Executive Vice President, Investor Relations, and Mr. Nikos Tribodakis, Chief Commercial Officer. Kindly note that Mr. Jerry Caligiratos, Chief Executive Officer, will join the call following the prepared remarks and will participate in the Q&A session. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question and answer session, at which time, if you would like to ask a question, you will need to press star 1 on your telephone and wait for your name to be announced. I must advise you that this call is being recorded today Thursday, May 7th, 2026. The statements in today's conference call that are not historical facts, including our expectations regarding the sale or acquisition transactions and the expected effect on us. Cash generation, equity returns, and future debt levels our ability to pursue growth opportunities, our expectations or objectives regarding future distribution amounts or share buyback amounts, dividend coverage, future earnings, capital allocation, as well as our expectations regarding market fundamentals and the employment of our vessels, including delivery dates, re-delivery dates, and charter rates, may be forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934 as amended. These forward-looking statements involve risks and uncertainties that could cause the stated or forecasted results to be materially different from those anticipated. Unless required by law, we expressly disclaim any obligation to update or revise any of these forward-looking statements. whether because of future events, new information, a change in our views or expectations to conform to actual results or otherwise. We make no prediction or statement about the performance of our common shares. I would now like to hand the call over to our speaker today, Mr. Brian Gallagher. Please go ahead, sir.

Thank you, operator. Good morning or afternoon to wherever you are, and thank you for listening to the Capital Clean Energy Carriers Q1 2026 earnings call. As a reminder, we'll be referring to the supporting slides available on our website as we go through today's presentation. So let's kick off with the highlights on slide four. Q1 showed further progress for the group across the board on three different fronts. Firstly, as we announced in our Q4 results in March, during the first quarter we raised an additional €250 million in a Greek bond with a 3.75% coupon. Secondly, and after the quarter end, we announced an innovative transaction with the energy trading group BGN, including a 10-year time charter for one of our existing LNG carriers. This will boost further our LNG revenue backlog to over $2.9 billion, which we'll cover more in detail later on. Thirdly, the business continued to deliver on all 14 of the vessels we had on the water during Q1, And this brought about a net income result of $18.3 million after off-hire periods and special survey costs incurred by two of our LNG carriers and was reflected in a cash dividend to our shareholders of 15 cents per share. In the final bullet on this slide, we show that we've got broad approval for a 20 million share buyback program over the next two years. Clearly, the outlook for the company and the sector has been dominated by events in the Middle East since February 28th, and our head of commercial, Nikos Tribodakis, will explore more on these slides and his remarks later on. With that, I'll now hand over to Nikos Kalapathor.

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Okay. So let me begin from the financial highlights for the period. So good morning or afternoon to everyone listening in today. Into slide six. Brian already touched upon the dividend payout, which remains an important and core component of the company's value proposition to shareholders. The 15 cents dividend we declared will be paid on May 20th to shareholders on record on May 11th. Please note that this is the 76th consecutive quarter that the company has paid the cash dividend. Net income from continued operations was 18.3 million for the first quarter of 2006 compared to 32.7 million during the same period in the previous year. Net income for the quarter was heavily impacted.

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So let me, I'm not sure what you have heard already, so let me start from the beginning, just to be sure. So, with respect to our financial highlights for the quarter, As Brian already touched upon, the dividend payout remains an important and core component of the company's value proposition to our shareholders. The 15 cents dividend we declared will be paid on May 20th to shareholders on record on May 11th. Please note that this is the 76th consecutive quarter.

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You may now resume. We have declared a dividend of 50 cents for the period, which will be paid on May 20th to shareholders on record on May 11th. Please note that this is the 76th consecutive quarter that the company has paid the gas dividend. Our net income from continued operations was $18.3 million for the first quarter of 2026, compared to $32.7 million during the same period in the previous year. Our net income for the quarter was heavily impacted by the off-hire periods and additional budgets and operating costs incurred by seven of our vessels, which passed their five-year special service during the period. Budget expenses specifically during the first quarter of 2036 amounted to $6.2 million compared to $1.1 million during the first quarter of 2025. The increase was mainly attributed to bunker expenses incurred by gas carrier active relating to the ballast leg from the CVAT into the delivery range under its charter, and the minor expenses incurred by two of our vessels passing the five-year special survey ballasting to their dry dock. In addition, budget expenses this quarter also included war-risk insurance premiums paid by certain of our vessels to the amount of 2.7 million due to the ongoing geopolitical tensions in the Middle East. Please note that these premiums were fully reimbursed by our charters and are included in revenue. Moving on to the next slide, there are four LNG vessels reaching their fifth year of HQ in 2026, namely Adama, who concluded their dry dock in March and April respectively, and Atalos and Daslipios, which we expect to commence their dry dock in the third quarter of this year. After that, none of our vessels is expected to pass a special survey until 2028. Also in terms of total dry docking costs, the guidance remains the same at 5 million per dry docking around 20 to 25 days of off-hire. The dry docks performed so far have been delivered ahead of budget and with fewer off-hire days. Moving now on to slide 8. We concluded the quarter with a cash position of 546 million, up from 296 million in the previous quarter, and with a net leverage ratio of 45.6%. The financial position of the company was further improved by the issuance of the 250 million euro bond in February, evidencing our ability to tap into alternative sources of funding. Moving now on slide 10, where we provide a summary of the expected new building deliveries for the remainder of the year. The LCO2 multi-gas carrier Amadeus was delivered to us a few days ago and is expected to trade in the LPG and Tamunia markets on short to medium-time charter business. In addition, we have brought forward the delivery dates of three LNG carriers, the Achimidis, the Agamemnon, and the Alkeos. One into what we expect to be a stronger charter market. We expect to report more on the employment of the Amateurs and LNG carriers in the coming weeks. Moving on to slide 11, our LNG fleet continues to provide long-term cash flow visibility to our investors. Following the BDN transaction, we now have 97 years of contracted backlog at an average TCE rate of approximately $86,400 per day, representing 2.9 billion of contracted revenue. If all options are exercised by our charters, the contracted backlog increases to 136 years or to 4.3 billion in contracted revenue, respectively. Turning now to slide 12 and the BGN transaction we announced in April. As announced, we have agreed to sell a 49% interest in Yamor MEO1, a 2023 built LNG carrier to a global energy trader, at a contract price of 230 million. The transaction is expected to be consummated in the first quarter of 2027 and will enable the company to retain a 51% stake in Manaften Oversight, while at the same time securing a 10-year time charter for the vessel, with options to extend for up to six additional years. The charter arrangement, if all options are exercised, is expected to generate up to 485.6 million revenues through 2043, further enhancing the visibility of the company's long-term cash flows. Moving now to our CAPEX program on slide 13, you can see the funding of our new building program is well supported. We have already paid a significant portion of the required capex, mainly supported by internally generated cash flows, asset monetization, and attractive debt financing, including the recent bond insurance. Part of the proceeds of the newly issued bond were used to repay the bond issued in 2021. We plan to use the remainder to support the financing of our CAPEX and for other general corporate purposes. As we progress through 2026 and 2027, we expect CAPEX to be mostly weighted toward the LNG carriers. As you can see, assuming 70% debt financing for the vessels that have not yet debt arrangements in place and without taking internally generated cash flows into account, We expect the company to be fully funded for the remaining capex and expect a significant amount of cash to be released back to the company. I would like now to turn to slide 15 and our Chief Commercial Officer, Nikos Tripodakis, who will run through our LNG market slides. I will then be available to answer your questions at the end of the call. Nikos, over to you.

Thank you, Nikos, and good morning or afternoon to everyone. The first quarter in LNG shipping was shaped by the conflict in the Middle East with a substantial part of global LNG volumes stranded in the Arabian Gulf, eclipsing any seasonal post-winter softening in charter rates. The attack in Qatar's Ras Al-Fan facility on the 18th of March marked a pivotal moment for the LNG and LNG shipping markets, directly affecting global LNG supply dynamics. Capital's role in the energy industry is indispensable, producing approximately 20% of the world's output annually, with nearly 80% destined for Asia, as illustrated by the chart on slide 15. This event represents a profound structural shift in our market, one that has fundamentally reshaped the landscape. As the chart indicates, the duration of Qatar's production outage is still unclear, but what is clear is that this outage will continue to up upwards pressure on prices and highlight the need for security and diversification of supply, mainly for Asian buyers, as we can see now in slide 16. The reduction in available LNG is not merely a past concern. It has already begun to reshape global energy market dynamics. We are witnessing a direct, fierce competition between Asia and Europe for what has become a much scarcer supply of commodities. European buyers must now act decisively to fill reserves ahead of winter, while gas storages in Europe remain approximately 20 percent lower than the five-year average. Meanwhile, Asian purchasing is also expected to be strong, albeit more price-sensitive. Looking ahead, energy security and security supply will be critical. This is a theme that we will revisit throughout this discussion. When it comes to the effect of the Qatari outage for energy shipping, flexible energy from the U.S. will inevitably travel structurally longer routes, resulting in extended tonnage and increased demand for modern tonnage. Moving over to slide 17, we will now take a look into the role of the U.S. as a source of reliable and flexible supply in the future. The United States... are now positioned at the heart of global energy market developments, taking on a central and indispensable role in shaping future supply and demand dynamics. Analysis produced prior to recent geopolitical shifts already highlighted the surge in U.S. energy volumes, with Asia set to capture a growing share. Looking ahead, the scale of and the demand for this expansion is staggering. Between now and 2035, an estimated 220 to 300 new energy vessels will be required to facilitate this expansion, followed by a replacement cycle demanding an additional 250 to 300 LNG carders beyond 2035. Turning now to slide 18. The recent geopolitical events of Q1, however, have not affected all LNG carders in the same way. Once again, large, modern, and efficient vessels like the one CCC controls reap the lion's share of the benefits while older and smaller latronas are finding it increasingly more challenging to secure employment once a long-term charter expires and then have to compete against larger vessels. As such, the impact is visible, with scrapping rates for all latronas climbing sharply. 2025 set a new benchmark for alien jacquardia scrapping, as illustrated by the chart on the left. Not only did we witness a record number of vessels sent to the breakers' yards, but the pace has accelerated even further in 2026. with five LNG carriers already scrapped in Q1 alone, while several others have been laid up. This run rate is unprecedented for this time of the year, underscoring the challenges that all the wrestlers face, and we only expect the trend to continue with approximately 80 to 100 steamships removed in the next three to five years. Combining now what we have discussed so far, let's have a look at CCC's position in this market. Turning to slide 19, CCC is uniquely positioned to excel in this environment of higher energy prices, longer ton miles, and need for fleet replacement. We control a lion's share of modern tonnage, more than 15% of all available new building vessels, and we provide unique flexibility compared to any other operator when it comes to both new building availability and diversification of delivery periods. On top of our six open new buildings, we're also set to benefit from vessels re-delivering to us from existing time charters towards the end of the decade, creating a staggered and a diversified re-delivery profile that allows us to capitalize on any commercial opportunity that arises in what is a very strong part of the forward-time charter curve, as it is shown in our supply and demand summary of SlotWit. Under our S&P model, the main assumption here is that the main assumption change is that the capacity reduction, for which we assume three years. We assume no change in the delivery schedule of new buildings, and many other look-up action projects. This pushes the inflection point slightly into 2028 from our previous estimate of the end of 27, exemplified by a net 231 LNG carders being delivered to a market requiring between 224 and 277, depending on FIP status. Clearly, there's a number of important and scalable moving parts within these assumptions. However, these dynamics highlighted in earlier slides provided with confidence and there is ample demand for energy shipping, which allows CCEC to benefit from this current dynamic geopolitical situation and generate positive returns for our shareholders. This concludes our presentation for today, and I'm happy to pass it back to the operator and open the floor for any questions. Thank you very much.

Thank you. We'll now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation time will indicate your line is in the question queue. You may press star 2 to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. We'll now answer the questions in the order they came to us. Our first question is from Alexander Bidwell with Weber Research. Good afternoon, guys. How are you doing?

Hi, Alex. How are you? Doing great, thanks. I wanted to circle back on the topic of LNG buyers and diversification. So how have you seen this impact charter sentiment around longer-term ton-mile demand? Are charters expecting diversification to stretch ton-miles into the back half of the decade?

It's a very good question and one that is very tricky to answer accurately. What we're seeing now is something that has never happened in the energy market and the energy shipping market before. That is a sense of uncertainty regarding the cathartic supplies for all the environs. So something that was a constant in the energy industry. promote the market without, you know, cathartic supply is constant and Asian buyers realize this. This war has shaken that consensus, and I believe more and more Asian buyers will go to the U.S. for their volumes. This is structurally and inevitably increasing tone models. Now, the extent of this is hard to gauge, but we do believe that this whole war will be very beneficial for U.S. volumes in the future. long-term plans as well.

Thank you. Appreciate the call. Just switching gears, appreciated the rundown on the more MIA-1 sale in the JV structure. Looking ahead, are you considering similar opportunistic deals to fix or open new builds? And is there any preference versus standard long-term charters?

I would say that this was rather opportunistic, as you said. It was a very good way of partly monetizing one of our older vessels in the fleet, of course, quite young overall. She will be four years old when the transaction takes place. and at the same time secure a 10-year charter for a position that, especially before the war, was a more difficult position given market conditions. So I would say it was opportunistic, but of course if the valuation is right and the employment is right, we would look at it again.

All right, that makes sense. Thank you very much. We'll turn it back over.

Thank you. Our next question is from Omar Nocta with Clarkson Securities.

Thank you. Hi, Jerry. Just a couple questions for me, maybe just one specifically to Capital. Apologies if you already answered this in your presentation, but just in terms of the early delivery of the new buildings by a few months' time, I just want to get a sense of what's behind that, what drove that. you to get those earlier, especially since I think two of them remain open for contract. Is there any kind of price concession you got from the yard for that, or are there charter opportunities maybe that are driving you to want to take delivery of them sooner?

Sure. I'll... I'll answer maybe the first part of the question with regard to how we go to the area of deliveries, and maybe, Nicole, you can take a bit of the market contrast, what we see for this episode. So the reason that we brought this delivery forward is because we thought that given the disruption, that there is a potential to capture some of the improved market conditions. But really to put this into context, how it came about, we have previously disclosed that the delivery of two withdrawals to delay two of our LNG carriers from their original grid schedule. Actually, one was delayed by a few months, and that was the Agamemnon. And now the Agamemnon really goes back to her original 2026 delivery. When the Archimedes and the Algeus, they were brought forward only slightly forward in Q3-26. Effectively, we worked, again, with the CIPIER to align the construction progress with what we now see as a strengthening market. And with regard to what we see, I think, Nico, there is definitely activity there. Well, the rationale behind advancing the deliveries of those two metro streets, one just by one month, is the fact that we wanted to capitalize on the strengthening of the front part of the curve to put it in perspective. The first month in Australia at 35,000, let's say at the end of January, right, so more than two-stroke presses in the Atlantic. Once the world broke out, that increased or spiked to 300,000. Now it has normalized to around 100,000 euros per day. And this effect and the high gas prices will also affect the month-to-month and one-year tax-charging rates. So effectively, from our side, it was a quick commercial move to capitalize on what we believed would be a persisting strong market. And what we can say now is that three months into the conflict, we are already in a position to win the benefit of that move, and we continue to see a very strong market for one year and winter charges.

Okay, that's very helpful. Interesting dynamic there. And then perhaps just as a follow-up, as you mentioned, spot rates were kind of loitering at the bottom before the crisis shot up to 300. Now we're at 100 and kind of seemingly steady there. Just maybe on that, are you surprised that rates have been able to hold up at these levels, just given how much of that Qatari capacity is offline? And what do you think is actually keeping rates elevated, given the lack of cargos, at least out of the Middle East?

It's a very good question. I think the main driver behind the increase in charging rates is the increase in the slot price of the commodities. Effectively, as well, matters a lot in energy shipping. It's not just, you know, tonnage and availability of ships. It's also the underlying margin that any trader or charterer can actually make on their cargoes. So when you have the commodity price in Dublin from $10, $11 per unit to $25 at the peak and now back down to $17, let's say, the margin is still open to support higher chartering. And again, the percentage increase on chartering is lower than the based on the commodities. So, yes, the ARB is important, and the open ARB supports short-term rates even more, but the most important thing is the flat price increase on the gas prices globally, and the fact that there is a lot of risk-free new pricing for multi-month and one-year durations. So, that removes also relapse lengths on the market. Sure, that is available.

Okay. Very interesting. Makes sense. Again, thank you, Nikos and Jerry. I'll pass it back. Thank you.

Our next question is from Liam Berg with B. Riley Securities. Thank you. Hi, Jerry.

How are you today? Good, thank you. Jerry, there's been a lot going on, to say the least, in the LNG market. Post-conflict, we have no idea how it shakes out, but has it changed your view of the non-LNG or LPG market for non-LNG gas transport market?

No, not really. If anything, again, here the war in Iran and the blockade of the homesteads have had beneficial impact on tax rates across the key segments of the LTC ammonia market. The LTC market is And the MTC market is mostly sold out. I think our next new deal is... in a very good position to capture the upside. We have seen fixtures, certain fixtures, minimum fixtures close to $30,000 a day. Markets have moved upwards. A one-year market for an entity is probably at the rate of $40,000 a day, potentially more than that. So, and the same with the high-end LPG markets, the same with, like, our GDP sales requirements. Again, we have seen an improvement in numbers compared to what you would be able to see both on the LNG side as well as what we are fixing on the SDG side over the coming weeks. There's quite a few things that we are working on that we cannot still discuss. improved market conditions. So, and in addition to that, I should also add that we have seen as a consequence, but also because of the wider new building market, the value is rising. So, this has been also quite beneficial for our intrinsic value for our NAB. So, overall, I think we have tailwinds across all markets. The only caveat is, of course, that there is huge vulnerability as well as circumstances that are quite unique. So we still need to see what happens in a little bit longer. Great. Thank you, Jerry.

And the JV, the sale of the Mario Mio, was to a global energy trading firm. Is this JV... I know you talked about it earlier, but is this a precursor to doing more business with global trading firms?

Look, when you put together a joint venture like that, there is always a potential for more business. BGN is also one of the largest, if not the largest, LPG trader out there, especially out of the U.S., and they have been successful. expanding their presence now into LNG. So there are potentially two contact points there, both the LNG and the SPG, because we can do more business. It could be more likely than not straightforward time charges or other sorts of employment. But as I said earlier on, when you have the template, it could be easy to look into similar ownership structures. So I hope that answers your question, but I think it's always good to be able to come together with companies that have this type of footprint. No, you've answered my question.

Thank you, Jerry.

Our next question is from Sharif El Maghrabi with BTIG.

Hi, good afternoon. Thanks for taking my questions. First, you talked about near-term strength in the curve. At the same time, Asia has been burning more coal. So is that something that you see as a structural headwind over the near term before, you know, before more LNG supply comes on in the U.S., for example?

As we mentioned in the presentation, the Asian market is more price sensitive, hence the more replacement by coal, and that has always been the case. But I think all of these dynamics are incorporated in the forward curve. And if you look at the forward curve for the commodity market, The balance of 2026 remains very strong. So, if anything, what has happened so far has been pricing. The replacement of coal is pricing in the curve, and the margins remain very healthy. Now, structurally, we don't expect this replacement to continue after a huge shift towards greener fuel and cleaner energy globally and in Asia. It is a discussion on your personal. Extended stock prices are high enough to support the margin that allows for trade rates to be very healthy.

Got it. And then shifting to LPG, what does the charter market look like for your LCO2 carriers? This is a bit more of a niche market I'm less familiar with, so it would be helpful to get any sort of color around what sort of routes they trade or what are the long-term time charter opportunities there?

I think this should be thinking of our 22,000 cubic liquid cells. So, as we have discussed in previous calls, the LCO2 business has a longer timeline, so the 2029-2030 type of dates. So until these emerge and we continue to work there with a number of chapters, we will simply trade the vessel as a sending SMPG carrier. So there you have multiple trades. You have LPG, you have petrochemical cartels, you have ammonia. And the expectation is that this vessel will trade into the, at least initially into the LBG business. And the current market rates, I would say, are probably one year, you see, closer to the 30-year low that is for one year. higher if you are trading in the stock market. This is a very versatile SIG. SIG can trade into many different trades. But as I said earlier on, right now the LPG market is quite strong, so we hope to be able to take advantage of that. Very helpful.

Okay. Thank you so much. Thank you. There are no further questions at this time.

I'd like to hand the floor back over to Mr. Jerry Calagirathos for any closing comments.

This concludes today's conference. You may disconnect your lines at this time. Thank you again for your participation.